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Study says telemedicine increases health costs

Physician Practice Insider, May 2, 2017

While proponents promote telemedicine as a way to reduce costs, a new study suggests telemedicine may actually generate higher healthcare costs when offered as an alternative to face-to-face visits.

The study, released in March by RAND Corporation and published in Health Affairs, analyzed the behavior of more than 300,000 people with access to telemedicine services and found they spent an average of $45 more per year than patients without access to telemedicine. The study authors concluded that access to telemedicine generates additional physician visits and the use of services that patients would not have otherwise pursued.

“Like some other new patient care models that promise to cut costs and reduce the hassle of receiving medical care, it appears that, in some cases, direct-to-consumer telehealth may increase spending rather than trim costs,” said J. Scott Ashwood, lead author of the study and an associate policy researcher for RAND.

The study noted that “instead of saving money by substitution (that is, replacing more expensive visits to EDs), direct-to-consumer telehealth may increase spending by new utilization (that is, increasing the total number of patient visits).” The study authors added that “while direct-to-consumer telemedicine services do increase patients’ access to convenient healthcare, researchers say new strategies such as higher copays or targeted marketing may be needed if telehealth is to fulfill its potential for cost-savings.”

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